Paper

Sources report little change in either direction for the recovered fiber market as 2006 winds down and the industry prepares to begin a new fiscal year.

Prices for old corrugated containers (OCC) have remained stable, with minor variances depending on region. Generation is tremendous says one Midwestern packer, contributing to an abundance of supply that is helping to keep prices somewhat depressed. The packer says the mild winter so far has contributed to the glut of material as people have no problem getting their material to the curb and drop-sites for pickup.

In addition, sources report that the market for old newspapers (ONP) is starting to slip after enjoying several strong months. Dropping investment in construction spending has begun to take its toll on the insulation market, which had been driving the demand for ONP for the past several months. The most recent statistics released by the U.S. Census Bureau in December report a 1 percent drop in total construction spending and a 1.9 percent decline in private residential construction—not promising statistics for insulators or for the materials they purchase. The ONP market is also suffering from an overabundance of supply as well, sources say, as newspapers are still thick with holiday advertising.

Demand for high grades remains strong, although a Midwestern source reports quality becoming a bigger issue as more material comes from the growing document destruction industry. She says the biggest culprit is "stickies," or adhesive material in sorted office paper (SOP).

Sources report steady export activity, with material moving particularly well out of the Pacific Northwest.

The market looks relatively solid going into the first quarter of 2007, although sources say much will depend on what winter weather brings, because bad weather can affect how companies build their inventories.

(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)

Private equity firm Palm Beach Capital, through one of its investment entities, has acquired Atlas Paper Mills. The acquisition is the seventh for the company as of November of 2006.

Atlas Paper Mills, located in Hialeah, Fla., manufactures tissue paper from 100 percent recovered fiber. The mill has an annual capacity of 36,000 tons and converts around 3 million cases of paper, paper towels and other types of paper produces for both the home and away-from-home markets. The mill has two paper machines and seven converting lines.

"Atlas Paper Mills is a wonderful acquisition for our firm," says Mike Schmickle of Palm Beach Capital. "It fits exactly within our investment criteria of being a well-run, growing company. And, the opportunity to partner with an experienced, entrepreneurial management team was very attractive to us."

Sonoco will close its Brantford, Ontario, tube and core plant by the end of 2006. The company’s paper mill and corporate offices in Brantford will not be affected by this closure.

The closing is part of Sonoco’s plans to reduce its cost structure which will include about 12 plant closings globally, principally in its international operations.

Several of the current 44 Brantford tube and core plant employees are expected to be transferred to other existing operations. The others will receive outplacement services.